Observations and Conversations about Commercial Construction, Development and Management

Online retailers opening their first physical stores need to be as well-versed in a shopping center’s holy trinity as proven and successful bricks-and-mortar retailers already are.

Not too long ago, many retailers and shopping center developers were getting a bit nervous as e-commerce began taking a bite out of their traditional in-store business. As a national commercial construction firm, we too experienced a slowdown in retail construction as many clients elected to construct smaller foot plates to save costs, give their existing space a light refresh rather than a full remodel, or simply held off on constructing new retail spaces as they figured out their next move to stay competitive.

But eventually things began to equalize, particularly as smart retailers and shopping centers reimagined their physical locations and worked with their commercial general contractor to create experiences that would give customers a reason to repeatedly visit their stores. Now, retailers are realizing there’s space for both online and bricks-and-mortar players in today’s omni-channel marketplace. In fact, one interesting 2015 commercial construction trend we’re seeing is the movement of online-only retailers entering the bricks-and-mortar world.

Bauer Hockey, Warby Parker, Blue Nile, Birchbox, Everlast Worldwide, Garnet Hill, and even e-commerce giant Amazon are just a few of the brands that have recently announced or opened physical storefronts. So what’s behind this clicks-to-mortar movement, and what does it mean for the future of retail construction?

In short, online brands are realizing the one thing missing from the online shopping experience is the experience itself. As much as consumers love the convenience, variety and great deals they often get when shopping online, there’s no replacing the opportunity to test out the latest gadget, try on a pair of jeans, or talk face-to-face with a knowledgeable salesperson.

As an experienced retail general contractor, it will be interesting to see how these online brands choose to create their retail locations. We know firsthand at Englewood Construction how vital it is for any company to evolve and stay relevant – that’s why we’ve tried new things like launching this blog and revamping our website.

For retailers, it’s especially important to stay relevant as trends come and go. Today, the hottest retail destinations are stores like Englewood Construction’s long-time client American Girl, where shoppers can completely immerse themselves in the brand experience, and successful shopping center developments that have evolved to offer extensive entertainment options, fine dining and more. No doubt we’ll all be watching as these online players evolve and step into the in-store world. And I’m sure more than a few of us will take inspiration from how they interpret their brands in physical spaces.

Of course, it goes without saying that for any brand new to opening a retail store, it’s important to work with a successful national general contractor well-versed in retail construction timelines and a shopping center’s holy trinity, not to mention the best safety and general construction practices. And whether you’re building a new bricks-and-mortar location or revitalizing an existing one to create an exciting new experience, bringing your commercial general contractor in on the ground floor will ensure the process goes as easy as possible – like the click of a button.

Working with a commercial contractor on a negotiated-bid basis, as Englewood Construction does with long-term client American Girl, can minimize the likelihood you’ll hear “no” from your GC during the bidding process.

As a national commercial contractor, we are first and foremost in the business of customer service. We want to please our clients and be a good partner to them plus everyone involved on a project. But that doesn’t mean we automatically subscribe to the theory that the customer is always right. In fact, as commercial construction experts, one of our primary roles is being the best advisers possible for our clients, which is why we sometimes find ourselves having to say “no” – and when we do, you can bet it’s for good reason.

Reason 1 – Not long ago, one of our construction superintendents notified a client that a piece of equipment the client provided us for an install was wrong for a job. Yet, despite our advice, the client insisted we use the piece he selected. Sure enough, the equipment didn’t work properly, and the $25,000 item had to be replaced. Remember, you hired a successful general construction firm because of its expertise, so you need to trust the GC wants to complete the project to the best standards possible. If we didn’t tell clients about a potential construction mistake, we wouldn’t be doing our job.

Reason 2 – “No” can also come up during the bidding process, particularly when there are unknown commercial construction costs that simply can’t be estimated. Sometimes there is an item we just can’t put a cost to until we dig in and start work, so the client assigns an “allowance” for that item as a placeholder in every commercial contractor’s bid, with the understanding the final cost is subject to change. For one recent bid, the client was ready to award us the project, but wanted to lock in the contract using an estimated allowance as the final price. As much as it pained us to say no, we declined the new-construction retail project because we couldn’t guarantee we’d be able to do the best job possible at that allowance price. It turns out we were right, as the true cost of the allowance item ended up being nearly $800k more than estimated.

This is also a terrific example of how working with a national general contractor on a negotiated bid works much better than a competitive bid. In a design-build job, your commercial contractor gets bids on those unknown items and incorporates that actual cost in your commercial construction budget. That can save everyone time and money in the long run, particularly for projects that are more complex.

Reason 3 – Speaking of competitive bids, we understand their popularity, but there are situations when we simply have to say “no” to competitive bids. If it’s clear the potential client is looking for a bargain price by opening the bid to a large number of commercial general contractors, we might choose not to participate. Contracts awarded on price alone can lead to lots of unanticipated problems – from lower quality work to missed deadlines and inflated change orders. We’re all for keeping commercial construction costs in check and making sure we’re getting our clients the best price possible. But at the same time, we’re most interested in working with clients who know there’s more to a successful construction job than cost.

We are firm believers that trusting relationships build better commercial construction projects, and we want to create a partnership with every client we serve – not just hit their bottom line.

So while we never like to deliver bad commercial construction news, sometimes it’s in the best interest of the client to ensure a successful construction project. And if you’re working with a commercial general contactor you trust, remember that if they tell you “no” it’s for a good reason – so be sure to listen.

Staying ahead of the curve, Englewood Construction recently launched a new website and secured a new domain name: www.ECI.build.

It’s rare for the words “cool” and “general contractor” to be used in the same sentence. But the other day my teenage daughter and her friends decided to Google their dads to see what came up and for a brief moment, I – who receives eye rolls for being so uncool – was suddenly quasi-famous.Every blog I’ve written for the award-winning HardHatChat popped up, interviews with media about the state of Chicago construction jobs – it was all there.

I tell you this because I think it’s a great example of how the commercial construction industry can stay relevant and keep current, despite the fact that there is very little innovation in the construction process itself. We still pour concrete and erect steel as we did decades ago, we still lay brick in mortar on brick, etc.

But just because one aspect of your business remains the same, it doesn’t give you a pass to be complacent. If you’re a shopping mall landlord, how often do you walk competing shopping centers to see if they are offering a more successful shopping center experience? Or how often do you visit their websites to see what they consider the latest retail and shopping mall news?

We’re certainly no stranger to monitoring the websites of fellow national general construction firms, especially in this day and age as technology evolves at breakneck speed. That’s one reason we recently launched our new website and secured a new domain name: www.ECI.build. If you haven’t visited the new site, please do, as you’ll see bigger and better project photos, plus it offers better mobile device navigation – something Google really likes.You can still find us at www.englewoodconstruction.com, but one thing we’ve learned over the years in best construction service practices is that you need to be where clients can find you and you need to give them what they want.

You may not have heard much about “.build” as a preferred domain for the commercial construction and development industry, but we feel strongly it will be embraced. And in typical Englewood Construction fashion, we wanted to be ahead of the curve.

Yes, I can hear many of you chuckle at that comment, especially if you’ve met Bill DiSanto, president of Englewood Construction. In person, he embodies the definition of an old-school general contractor. But this man, who grew up in Chicago’s Pullman neighborhood, received a degree in architecture from the University of Illinois and then went on to run the Chicago office of the nation’s third-largest retail construction firm before launching Englewood Construction, is one of the biggest embracers of change to better serve his clients, employees and the industry.

In 2010, HardHatChat was one of the first commercial construction blogs of its kind. At the time, Bill was a little skeptical if people would even read it, and he didn’t really understand how the blog “got out there,” but he knew we had years of educational insights and commercial construction best practices to share. More importantly, he believed in his team, which believed in the blog.

Now, 95 posts later, HardHatChat received over 6500 views in 2014 and our audience is continuing to grow.

If you want your business to flourish, it has to come from the top down. Bill will be the first to say that if you think something is good for your business, but you don’t understand it, then hire someone who does.

For example, during the downturn, we hired our first PR/marketing firm and soon our work with national retailers like American Girl was on the cover of magazines, and the phone was ringing more than usual.

In 2012, we decided to expand our commercial construction networking opportunities and become a sponsor of the Ryder Cup, which took place close to our headquarters.

We’ve also added a number of new team members who bring a fresh perspective to how we can do business better and more efficiently, especially with our internal technology systems. Their innovative ideas have resulted in thousands of dollars of savings that have been passed along to our clients.

So, now that you know what Englewood Construction is doing to stay relevant in today’s commercial real estate industry, what are you doing?